Horizon Global Corp. reported an operating loss of $170.4 million during the fourth quarter and full-year financial results for 2018.
“This past year, we took considerable steps to improve operational performance, reset the business in the U.S., and establish a foundation for top- and bottom-line growth in 2019 and beyond,” commented Carl Bizon, president and chief executive officer of Horizon Global. “As Interim CEO and then permanent CEO since October, we made impactful changes to our leadership team, including new leaders in Europe-Africa, and, most recently, the addition of Barry Steele as our new permanent CFO. We completed the action plan for the Americas and are now delivering efficiently from our primary U.S. distribution center in Kansas City, with past due orders in the Americas decreased to less than $6.0 million at the end of 2018 from $8.5 million at the end of the third quarter and a seasonal peak of $26.0 million.”
Horizon Americas. Net sales decreased 19.7 percent, with this decrease attributable to higher volume shipments in 2017 related to a year-end sales promotion program that was not repeated in 2018, higher customer sales allowances, higher retail penalties and the 2017 divestiture of the Broom and Brush business. On a constant currency basis, net sales decreased 19.3 percent. During 2018, the Americas reported an operating loss of $11.6 million as compared to operating profit of $5.2 million in 2017. The 2018 result included special items including $5.8 million in retail penalties and restructuring expenses of $2.1 million. During 2017, there were no retail fines and penalties and restructuring charges were only $1.1 million. Adjusting for these expenses, adjusted operating loss in 2018 was $3.7 million compared with adjusted operating profit of $6.6 million in 2017. This decrease in adjusted operating profit was due to the lower sales, higher freight and material costs not recaptured by pricing increases and higher labor costs in the Kansas City distribution center during 2018 and a benefit in 2017 from the reversal in accrued bonuses. These were partially offset by headcount and other expense reduction initiatives.
Bizon concluded, “We are optimistic regarding our outlook for the year, although we are experiencing a slow start to the prime spring and summer selling season in the U.S. due to cold and wet weather conditions impacting numerous industries. With our new financing in place, providing the liquidity and capital flexibility we need to execute our business plan, we have a stronger foundation from which to operate in the coming year. Our senior leadership team is now fully transitioned with the addition of a permanent CFO, and we are operating as one team with one goal to complete the operational turnaround at Horizon Global. We remain focused on providing the best products and service to our customers and end-users, ultimately translating to enhanced value for our shareholders.”
